**GM preparing for bankruptcy**

[Ohio XB]

Deech, you're a 20-something and you've got that grasp on small business?? How did that happen?? :


You've got a successful future ahead of you.



Steve

[Deech]

Originally Posted by Ohio XB

Deech, you're a 20-something and you've got that grasp on small business?? How did that happen?? : *snip*

Thanks for the kind words both. As to how I became so cynical, I believe there are two attitudes to take:

You finish school, work a full time week, and grasp the distinction between being "at work" and working.
Upon receiving pay for the week, your point of view is now at a crossroads:

A) "I only got paid $1000 this week, my parents earnt like $1500, and my boss earns about $2k+. Capitalism therefore blows!"

B) "Wow, having worked a bit and put myself slightly ahead, subject to very little risk and responsibility, with pay that's quite good considering that, it puts into perspective how hard and for how long my parents and boss must have worked to make as much for themselves as they did. My pay reflects this. Especially considering they have families to go home to, and many more bills to pay. This is Capitalism, and next week I shall work harder!"

Seriously though, thanks for the compliments.

[Laminge]

Back on topic, you amuse me no longer

[Deech]

Acknowledged.

If GM splits itself and discards it's non-profitable units, which ones are actually making a profit?

If GM as a complete entity is running at massive losses, I'm confused how some brands are running at a profit, but are dragged down by the other ones if costs are shared.

As an example to show what I mean, the Pontiac G8 is basically a rebadged LHD VE. Let's assume Holden spent $1B Au on R&D costs of the Commodore, and Pontiac only spend $50 million to change the badges, bonnet and grille. If both intend to recover their costs by a markup in the retail price of the car, Pontiac has to shift fewer units to break even on the project. Now, let's assume that Pontiac is running at a profit, the G8 is still selling in the US, and Holden hasn't made back their development budget yet, and is still at a loss. In that case, ditching the unprofitable Holden for the profitable Pontiac wouldn't work, as Pontiac must now develop their own car for the replacement model from scratch.

See what I mean? If GM US is really one big, engine-sharing, platform-swapping entity trading under many different marques, it's kind of hard for one outlet to be profitable, and the others not.

Unless they're seperating them into say, GM South Korea being profitable, but GM US is a loss....

That's really scary

[Fordman1]

Originally Posted by Wally

What do you bring to the table that makes you so cocksure you know who I am and what I know? Tell us how you are a success in business and all things economic that gives you a unique insight into why a foreign govt should nationalise it's industry... Germany 1934?

Germany 1934 ? Mate, take a deep breath. Bad day at work Hey ?

My Occupation ?

Over 20 years in Manufacturing, including quite a few stints in Europe and North America. I'm doing Ok and I know the manufacturing business quite well :

Back on topic...

GM are now operating on emergency funding from the US Government, and many thousands of 'workers' both here (Holden) and in the US, are relying on the 'right' decisions being made from here on !

If it takes the US Government to 'drive' the change at GM, so be it. It seems those that have been 'running the show' up until now have been 'hoping' rather than planning. There are many families whose futures rely on bringing this company back from the brink.

It's a shame Wally that many of these people (workers) aren't as smart and succesful as you.

[Piotr]

Originally Posted by Deech

Acknowledged.

If GM splits itself and discards it's non-profitable units, which ones are actually making a profit?

If GM as a complete entity is running at massive losses, I'm confused how some brands are running at a profit, but are dragged down by the other ones if costs are shared.

As an example to show what I mean, the Pontiac G8 is basically a rebadged LHD VE. Let's assume Holden spent $1B Au on R&D costs of the Commodore, and Pontiac only spend $50 million to change the badges, bonnet and grille. If both intend to recover their costs by a markup in the retail price of the car, Pontiac has to shift fewer units to break even on the project. Now, let's assume that Pontiac is running at a profit, the G8 is still selling in the US, and Holden hasn't made back their development budget yet, and is still at a loss. In that case, ditching the unprofitable Holden for the profitable Pontiac wouldn't work, as Pontiac must now develop their own car for the replacement model from scratch.

See what I mean? If GM US is really one big, engine-sharing, platform-swapping entity trading under many different marques, it's kind of hard for one outlet to be profitable, and the others not.

Unless they're seperating them into say, GM South Korea being profitable, but GM US is a loss....

That's really scary

What would probably happen in a situation like this would be

1: A new entity is created to run the "new" GM.
2: The said entity buys all the "good" assets off GM
3: New entity trades on

4: Old GM is left with a large amount of liabilities, few assets and no prospect of recovery. Assets are sold off and a distribution made to creditors


Its very common for some divisions of a business to run at a loss and other at a profit. The problem GM have is that too many are running at too high a loss

[Deech]

Originally Posted by Piotr

Its very common for some divisions of a business to run at a loss and other at a profit. The problem GM have is that too many are running at too high a loss

Yeah, I get that. The dealership sells cars for no profit/loss, and recovers money at routine services for example, Toyota style. Sony sells consoles at a loss, and makes it back through much lower unit production costs of games, or at least that's how it was supposed to have been with the PS3 in the early days.

But I don't see how they can sell the same product at both departments, run the same line of engines etc, and one profits and the other one loses.

Also, I still would like to know which marques are profitable, and whether profitability includes future earning potential. Say, Chevrolet may be running at a loss right now selling the wrong cars while Rome burns, but it's got the heritage, so if bought by creditors and turned around, it'd be easier to attract people to the 'new' Chev, than the new Daewoo.

[Wally]

Originally Posted by Barraxr8

........It's a shame Wally that many of these people (workers) aren't as smart and succesful as you.

Obviously.

Stay on track mate, Laminge has already given a warning.

Deech the US govt released it's intent a day or so ago to the financial sector. It is as I posted earlier, even though some think I made it up. :

[Deech]

Yeah, true

One scenario under consideration would divide the Detroit automaker into a "good" company and a "bad" company, allowing the more viable parts of the automaker -- assets like Chevrolet, Buick and Cadillac -- to emerge from bankruptcy within a month.

Well, that's my question answered. So those three have a really good profit to debt ratio? Or is a month just overoptimistic?

[Piotr]

Originally Posted by Deech

Yeah, true



Well, that's my question answered. So those three have a really good profit to debt ratio? Or is a month just overoptimistic?

They are essentially reborn with no debt (apart from finance used the buy the brand).

When profitability is looked at only future trading prospects are taken into account.

[Gobes32]

So would Chevrolet, Proton and Buick become separate companies or do they still trade under a banner company?

[gtfpv]

Originally Posted by Piotr

They are essentially reborn with no debt (apart from finance used the buy the brand).

When profitability is looked at only future trading prospects are taken into account.

otherwise known as . CORPERATE THEFT !. where everyone takes a loss , except the company. but, thats life . america prints money out of thin air , so they can just ignore losses and let everuyone suffer , while they print some more and start again . anyhow . thats the only solution really.

[DougM]

Originally Posted by gtfpv

otherwise known as . CORPERATE THEFT !. where everyone takes a loss , except the company. but, thats life . america prints money out of thin air , so they can just ignore losses and let everuyone suffer , while they print some more and start again . anyhow . thats the only solution really.

That's what I was thinking too.........I can't stand big corporations for that reason........I'm no expert on big business but it just doesn't sound right to me....Saving the company for the sake of jobs within that company I understand but what about all the creditors who are owed millions??? What happens to them and their staff if they can't carry that cost???????? It;s the smaller businesses that suffer the hardest blows......
I wouldn't want anyone to lose their jobs but why shoud the creditors(suppliers) who have done nothing wrong pay the price for this mess????

[gtfpv]

Originally Posted by DougM

That's what I was thinking too.........I can't stand big corporations for that reason........I'm no expert on big business but it just doesn't sound right to me....Saving the company for the sake of jobs within that company I understand but what about all the creditors who are owed millions??? What happens to them and their staff if they can't carry that cost???????? It;s the smaller businesses that suffer the hardest blows......
I wouldn't want anyone to lose their jobs but why shoud the creditors(suppliers) who have done nothing wrong pay the price for this mess????

cant say i dont agree with you . but the reality is that all those creditors would be going down anyway. i know it's irresponsible , but it's always a last resort and the way it is . the sole worst thing about it , is when it sets precedence the book is open for fraud on massive scales. there isnt anyway out though sometimes. not saying i agree with it . but what would be an alternative answer ????

[Fordman1]

Originally Posted by Gobes32

So would Chevrolet, Proton and Buick become separate companies or do they still trade under a banner company?

Proton ? The Malaysian cars built on Mitsubishi platforms ?

[Piotr]

Originally Posted by gtfpv

otherwise known as . CORPERATE THEFT !. where everyone takes a loss , except the company. but, thats life . america prints money out of thin air , so they can just ignore losses and let everuyone suffer , while they print some more and start again . anyhow . thats the only solution really.

Its not theft, its the basic concept of the corporation. Yes people will lose money but this is the BEST outcome for all. When a business unti is sold as a whole the sale price is MUCH higher than what would be realised in a liquidation thus giving creditors the best possible return.

What do you mean the company doesn't take a loss? It ceased to exist after liquidation.

[Jason[98.EL]]

This one taken from ninemsn

GM in talks to sell Saturn brand
16/04/2009 9:28:27 AM

Struggling US automaker General Motors said on Wednesday it was in talks to potentially sell its Saturn group to one of two private investor groups that have expressed an interest in the dealership network.

The sale of Saturn to outside investors could turn the GM unit into a future conduit for Indian and Chinese cars to enter the United States.

The lack of a defined dealer network, along with strict US safety regulations, are frequently cited as the principal barriers to the entry of relatively inexpensive cars made in China or India.

GM has said it would continue to supply vehicles to Saturn until 2011 but will wind down or sell the group as part of a massive restructuring program.

"Over approximately the past 60 days, a sub-committee of Saturn retailers has been studying the feasibility of the sale or spin-off options, and has identified some parties that are potentially interested in a purchase or spin-off of Saturn," GM said in a statement.

The company identified Black Oak Partners as one of the groups but said it was "not at liberty" to discuss any other interested party.

"It is simply premature at this time to speculate on what any eventual outcome may be," the statement added.

Individual Saturn dealers have said other vehicle suppliers could be lined up.

Chinese vehicle manufacturers already work through a variety of distribution companies to export vehicles to Russia and the Middle East.

The Saturn distribution company currently operates 440 dealerships in the United States that sell GM but the number is expected to decline as GM continues to restructure.

GM spokesman Tom Wilkinson said the company would not comment on the fate of its hulking Hummer brand, which was put up for sale last summer.

"We haven't made any decision yet," he said.

Meanwhile, GM is still negotiating with the United Auto Workers and bond holders to cuts costs. The outcome of the negotiations is likely to decide whether GM has to file for bankruptcy protection.

Looks like GM are attempting to make the hard moves but could it be to little to late

Jason

[Gobes32]

A bit off topic, but I really don't think the US will take to chinese cars. They are fiercely patriotic and in times like these you would think they will rally behind their local manufacturing.

[Ohio XB]

Originally Posted by gtfpv

otherwise known as . CORPERATE THEFT !. where everyone takes a loss , except the company. but, thats life . america prints money out of thin air , so they can just ignore losses and let everuyone suffer , while they print some more and start again . anyhow . thats the only solution really.

Just to be clear, Obama is printing money out of thin air, and this scares the hell out of many Americans, as well as ****es us off. As soon as the economy starts to recover we are going to be slammed by massive inflation. I noticed today that the US dollar is already begining to fall against the Aussie dollar and the Canadian dollar. Good news for guys looking to buy speed parts from US. Then there is also the point where Obama complained about inheriting a $1.5 trillion debt, yet is spending upwards of $9 trillion himself, as soon as he can get it printed.



I do not understand the Good GM/ Bad GM theory. Granted, I have no formal training in these kinds of matters but I am also not an idiot. I know "money people" can get away with all kinds of tricks, but I don't understand how they can get away with this trick in such bright light. I've heard a lot about this but it just doesn't seem real. Let a citizen try to pull that!



Steve

[Ohio XB]

Originally Posted by Gobes32

A bit off topic, but I really don't think the US will take to chinese cars. They are fiercely patriotic and in times like these you would think they will rally behind their local manufacturing.

There is a percentage of young Americans that only know Chinese products so they may be willing to buy a Chinese car. A percentage of those Americans will get their asses kicked by their parents.

The majoity of Americans (my belief) will not buy a Chinese made death trap. If GM were to ship Buicks from China to the US there would be a huge fire in Detroit, so only Chinese brand cars could be sold here.....but I don't see their sales taking off.


Steve

[Piotr]

Originally Posted by Ohio XB

Just to be clear, Obama is printing money out of thin air, and this scares the hell out of many Americans, as well as ****es us off. As soon as the economy starts to recover we are going to be slammed by massive inflation. I noticed today that the US dollar is already begining to fall against the Aussie dollar and the Canadian dollar. Good news for guys looking to buy speed parts from US. Then there is also the point where Obama complained about inheriting a $1.5 trillion debt, yet is spending upwards of $9 trillion himself, as soon as he can get it printed.



I do not understand the Good GM/ Bad GM theory. Granted, I have no formal training in these kinds of matters but I am also not an idiot. I know "money people" can get away with all kinds of tricks, but I don't understand how they can get away with this trick in such bright light. I've heard a lot about this but it just doesn't seem real. Let a citizen try to pull that!



Steve

The US government doesn't and can't print money. Money supply is controlled by the Federal Reserve.

[gtfpv]

Originally Posted by Ohio XB

There is a percentage of young Americans that only know Chinese products so they may be willing to buy a Chinese car. A percentage of those Americans will get their asses kicked by their parents.

The majoity of Americans (my belief) will not buy a Chinese made death trap. If GM were to ship Buicks from China to the US there would be a huge fire in Detroit, so only Chinese brand cars could be sold here.....but I don't see their sales taking off.


Steve

great post .
like farming , could we be going 25 years backwards to sell olod technology unregulated to the world . starting to look that way.
eg : fruit and veggies to be grown with regulations including no child labour , no swerage , and no toxic waste nearby, using clean water . TO stuff it china and vietnam can produce these for A 10 TH OF THE PRICE . . now lets see can we get a chinese FOCUS , BUILT to the same standards as a 1979 XD FALCON , in modern guise . me thinks so.

i might add that can china produce highest quality. my hoath they can . however regulatory laws may prompt corperate bodies to cash in on shortcuts . hypothetical yes , but the westewrn corperates are to blame .

[gtfpv]

Originally Posted by Piotr

The US government doesn't and can't print money. Money supply is controlled by the Federal Reserve.

haha . what basis do you back this up on , besides your own mind ??

[Scott]

Originally Posted by gtfpv

haha . what basis do you back this up on , besides your own mind ??

I'd be more interested in hearing why you disagree?

[Ohio XB]

Originally Posted by Piotr

The US government doesn't and can't print money. Money supply is controlled by the Federal Reserve.

At the instruction of Obama, currently.


Steve

[Bent8]

Originally Posted by Piotr

The US government doesn't and can't print money. Money supply is controlled by the Federal Reserve.

That's true, JFK tried to change this and we all know what happened to him!

The "financial crisis" has been engineered over many decades in order to bring in a global currency and a NWO (New World Order).

Don't believe me?...watch this.

http://vids.myspace.com/index.cfm?fu...deoID=26349776

[shakows]

http://www.reuters.com/article/domes...53D31P20090414

GM have to recall 1.5 Million Car's, what bad timing

Problem with the 3.8L catching on fire, wonder if its the same as the ECOTEC

[Bossxr8]

Originally Posted by Bent8

That's true, JFK tried to change this and we all know what happened to him!

Back and to the left wasn't it?

Anyone who's seen Bill Hicks Relentless will know what i'm talking about.

[Grunter]

Pretty much the same information as current, but interesting that GM's CEO has confirmed both options.

http://money.ninemsn.com.au/article.aspx?id=803047

GM CEO says bankruptcy probable
18/04/2009 6:10:24 AM
General Motors Corp chief executive Fritz Henderson says a bankruptcy filing is "probable" because of the restructuring goals GM must meet to get more US government loans, but that isn't the company's preferred option.

In a conference call with reporters on Friday, Henderson said GM was working on two parallel plans: one that involves bankruptcy and one that doesn't.

"Contingency planning is under way," he says. "We are on several tracks."

Henderson also said GM would need more government aid sometime in the second quarter, although the timing had yet to be decided. In its viability plan filed on February 17, the company said it would need $US4.6 billion ($A6.4 billion) in the quarter, and that hadn't changed, he said.

"At this point, it would be premature to say that there has been an approval for further funding, at least from a GM perspective."

GM has received $US13.4 billion ($A18.6 billion) in government loans, and it must meet strict requirements to cut labour costs and debt by June 1. Henderson said the company would be prepared to file for bankruptcy if it was unable to reach those goals out of court.

The decision to file for bankruptcy would be made with the Treasury Department and GM's board of directors, but the government is not pressuring GM to file, Henderson said.

"I felt several weeks ago that it would be more probable that we would need to go through a bankruptcy process," he told reporters. "I certainly feel that way. That continues today. But I wouldn't be able to hazard a guess as to what the probabilities would be."

If GM does file for bankruptcy, Henderson said speed was important. GM would seek agreements with creditors and union before filing, or go through a fast in-court process.

"It's all about speed," he said. "This environment is not helpful for us."

Henderson said GM has been focused on rebuilding its viability strategy so it hasn't yet launched intensive discussions with its bondholders. Talks with the United Auto Workers, he said, are second in line to Chrysler, which faces an April 30 deadline to restructure and forge an alliance with Italy's Fiat Group.

Henderson emphasised that GM's restructuring plan called for the automaker to keep four core brands - Chevrolet, Cadillac, GMC and Buick - adding that GMC and Buick were highly profitable.

He also said the company would not sell its ACDelco parts division, despite having potential buyers.

"It's a highly profitable business for us, it's creating good, strong cash flow," Henderson said. "Our conclusion was that we weren't going to get the value for the business. We'd rather keep it and grow it."

Henderson also said April sales were "OK", but he did not elaborate.

[csv8]

US govt tells GM to prepare for bankruptcy filing


The US Treasury Department has told General Motors to make all necessary preparations for a possible bankruptcy filing by June 1, even though the troubled automaker insists it can restructure its business on its own, The New York Times reported.

Citing unnamed people "with knowledge of the plans," the newspaper said the instructions had been conveyed by members of President Barack Obama?s automotive task force, who spent last week in meetings and on conference calls with GM in Detroit and Washington.

The talks are expected to continue this week, the report said.

According to the paper, the goal is to prepare GM for a fast "surgical" bankruptcy.

The automaker already has been granted 13.4 billion US dollars in federal aid, and its managers are insisting the company's image should not be damaged.

The preparations are aimed at assuring a GM bankruptcy filing is ready should the company be unable to reach agreement with bondholders to exchange roughly 28 billion US dollars in debt into equity in GM and with the United Automobile Workers union, which has balked at granting concessions without sacrifices from bondholders, The Times said.

© 2009 AFP

Not looking good for GM..We mightn't like HOLDEN but we need HOLDEN so we can rubbish a competitor. Ricers aren't our equal.